Payments Law Update | Spring 2020

Written on 9 Apr 2020

Welcome to the latest edition of Osborne Clarke’s Payments Law Update.

Covid-19 continues to have a significant impact across the financial services sector. The FCA is aware of the challenges that it poses to firms providing payment services, and has adapted its guidance as the situation has developed – most recently with respect to the implementation of Strong Customer Authentication. We also cast a critical eye over the FCA's new lending guidance designed to offer temporary financial relief to customers.

The payments sphere is constantly changing. With increased competition due to the emergence of FinTechs, new payments-enabling technologies, and an ever-changing regulatory landscape, market participants will do well to keep up. To help you stay ahead of developments, we highlight the dates to be aware of in 2020 and beyond.

The UK has left the EU and entered into a "transition period", but until when? We should know the answer to this within the next three months. In the meantime, nothing changes, right? If you are a payment service provider looking to continue your cross-border business, we provide answers to some of the questions you may be asking yourself.

Finally, there have been some surprising legal developments in Germany recently. Find out about these, what the FCA's new Business Plan means for payments firms and other news that may not have crossed your radar, in our Payments law round-up.

If you would like to discuss any of the topics we have covered, please contact one of the experts listed below.

FCA adapts its approach to SCA requirements

The FCA says that payment and retail banking firms must continue to monitor their fraud rates and take swift action if they see their fraud rates rising, or new patterns of fraud. A key tool to combat fraud is the use of strong customer authentication (SCA). However, the challenges thrown up by Covid-19 are leaving many firms struggling to adopt SCA. In this Insight, we look at the FCA's expectations and the changes it has made to assist firms with SCA implementation.

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New FCA lending guidance offers temporary financial relief for customers

As Covid-19 bites on economic activity in the UK, consumer credit firms are now expected to take steps to help customers weather the storm during this challenging time.

How should firms react to the increasing numbers of customers who wish to temporarily suspend their monthly loan and credit card payments, whilst remaining confident that they are still meeting their legal and regulatory requirements? In this Insight we set out what firms need to do and highlight some pitfalls to steer clear of.

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The payments pipeline

The payments industry is one of the fastest moving and innovative areas in financial services – with technology and regulation reshaping and redefining the sector at a rapid speed. The FCA is prepared for the challenge and has published a teaser on how regulatory change will play out over the next two years. Will 2020 bring fundamental change in the world of payments regulation? To help you stay ahead of these developments, here are the dates to be aware of in 2020 and beyond.

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The UK has exited: nothing has changed, right?

On 31 January 2020, the UK departed the EU and entered into a "transition period". With firms facing unprecedented challenges from Covid-19, Brexit has understandably fallen off the agenda for the time being. However, in less than three months we will know whether the transition period will be extended, and if so, to when. Businesses will be hoping an extension is agreed sooner rather than later, so that they can set aside immediate Brexit planning considerations to focus on more pressing matters.

If you are a payment service provider looking to continue your cross-border business, here are answers to some of the questions you may be asking yourself.

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In brief | Payments law round-up

In this Insight we highlight recent developments from across the EU that payments firms need to be aware of, including the FCA's new Business Plan, the latest on whether the UK's money laundering regulations will apply to providers of AIS and PIS and the application of Lex Apple Pay in Germany.

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